Back to school sales tax holidays for 2012

Seventeen states will be exempting various back to school items from sales tax this year

Shoppers get excited about the many back to school sales this time of year. Adding fuel to the fire, many states will be waiving the state, and sometimes local, sales tax on school-related items. Generally, this means clothing, footwear, school supplies such as pencils and paper, and sometimes computers are exempted from sales and use tax for anywhere from two days to a week.Sales tax holidays for 2012

While some state representatives bemoan the loss of the sales tax revenue during this purchasing frenzy, many retailers, already offering various sales and discounts, appreciate the extra incentive shoppers are given to open their wallets. The cost versus benefit of these sales tax holidays is the subject of frequent debate but one fact is clear – consumers love it.

Consumers need to keep in mind that even though the state may be waiving the sales tax, certain local taxes, such as county, city, and/or special district may still apply. For instance, the purchase of an $800 computer in Atlanta, Georgia made on Aug. 10 qualifies for a waiver of the 4% Georgia state tax  – saving a total of $32. It is still subject to the Fulton county tax of 3% plus the Atlanta metro tax of 1%, meaning that the consumer will pay $32 in local taxes on the purchase instead of the usual $64.

Some states, such as Louisiana, waive the sales and use tax on nearly all retail transactions during the back to school holiday. Normally though, exemptions are limited to items specifically targeted toward getting kids ready to return to academia. Most states also limit the exemption to sales, or portions of sales, below a certain dollar threshold – generally purchases retailing at less than $100 per item. In other words, no matter where Kim Kardashian is shopping, she’s going to be paying the full sales tax on the Gucci pumps and diamond-studded iPhone.

The sales tax exemption rules can get quite complicated, so consumers need to do their homework diligently before they hit the mall. The type of sale the store chooses to host can make an otherwise-eligible item taxable. In one example, a retailer in a state with a $50 threshold advertises pants as “buy one, get one free.” The first pair of pants is priced at $80; the second pair of pants is free. Tax is due on $80. The store cannot sell each pair of pants for $40 in order for the items to qualify for the exemption. However, the retailer may advertise and sell the items for 50% off, selling each pair of $80 pants for $40, making each pair eligible for the exemption.

Manufacturers’ coupons and rebates do not reduce the sales price of an item in the eyes of the tax collector. Store coupons and discounts do reduce the sales price therefore making many more items fall within the dollar cap.

Layaways, gift certificates, and rain checks qualify for the sales tax exemptions. Exchanges made post-holiday are not taxable, but items purchased during the sales tax holiday and returned for a refund paired with a new purchase are taxable.

Below is a full listing of states holding back to school sales tax holidays this year. The holiday dates, percentage shoppers can expect to save, and general rules governing the eligibility of items are provided. This list is not all inclusive, so please check the provided state web sites for specifics.

 

State Dates Savings Clothing & footwear Accessories School Supplies Computers/accessories School Books
Alabama Aug. 3-5 4% < $100 < $50 < $750 < $30
Arkansas Aug. 4-5 6% < $100 < $50 Yes
Connecticut Aug. 19-25 6.35% Portion < $300
Florida Aug. 3-5 6% < $75 < $75 < $15
Georgia Aug. 10-11 4% < $20 < $1,000
Iowa Aug. 3-4 6% < $100
Louisian Aug. 3-4 4% Portion < $2,500 Portion < $2,500 Portion < $2,500 Portion < $2,500 Portion < $2,500
Maryland Aug. 12-18 6% < $100
Mississippi July 27-28 7% < $100
Missouri Aug. 3-5 4.23% < $100 < $50 < $3,500/ software < $350 <$50
New Mexico Aug. 3-5 5.13% < $100 < $30 < $1,000/supplies <$500 < $30
North Carolina Aug. 3-5 4.75% < $100 < $100 < $3,500/ supplies < $250
Oklahoma Aug. 3-5 4.50% < $100
South Carolina Aug. 3-5 6% Yes Yes Yes Yes
Tennessee Aug. 3-5 7% < $100 < $100 < $1,500
Texas Aug. 17-19 6.25% < $100 < $100
Virginia Aug. 3-5 5% < $100 < $20

 

Charles F. Spielmann

Charles F. Spielmann

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Energy Star tax free weekend in Texas

tax free weekend

tax free weekend

Texas declares a tax free weekend for ENERGY STAR appliances.  Sales tax holiday begins at 12:01 a.m. (after midnight) on Saturday, May 26, and ends at 11:59 p.m. on Monday, May 28 (Memorial Day).

A tax free weekend for Energy Star Appliances

Energy Star Appliances are Tax Free in Texas over Memorial Day Weekend

The products qualifying for the exemption are:
Air conditioners priced at $6,000 or less
Refrigerators priced at $2,000 or less
Ceiling fans
Incandescent and fluorescent light bulbs
Clothes washers*
Dishwashers
Dehumidifiers
Programmable thermostats**

* Because most dryers use similar amounts of energy, ENERGY STAR does not label clothes dryers.

** ENERGY STAR specification of programmable thermostats was suspended on December 31, 2009; however, any existing stock of ENERGY STAR labeled programmable thermostats offered for sale by retailers is still eligible for the exemption.

 

Washington state sales tax sourcing for florist deliveries

Washington state sales tax sourcing

Washington state sales tax sourcing

In July of 2008, Washington state sales tax sourcing moved from origin to destination-based sales tax sourcing. That applies to everyone

Washington state sales tax sourcing

Flower deliveries are exempt from the 2008 switch to destination-based sales tax in Washington

except florists. Certain florists may continue using origination to determine the sales and use tax due on a retail transaction, specifically when one florist takes an order and passes along that order to another florist who then delivers the flowers to the location designated by the customer.

Certain florists may continue using origination to determine the sales and use tax due on a retail transaction, specifically when one florist takes an order and passes along that order to another florist who then delivers the flowers to the location designated by the customer.

Certain other sourcing exemptions apply to leases, rentals, and telecommunications services.

It’s 2011 Sales Tax Holiday Time Again

Tax Holiday Time

Tax Holiday Time

By Charles F. Spielmann

Parents everywhere are brimming with excitement in anticipation of sending their kids back to school. As much of a relief as that can be, the list of required supplies the school just sent out, not to mention the endless fashion items the kids claim they just HAVE to have, can make that feeling of joy drain away quickly.

This year, sixteen states have taken pity upon these unfortunate parents and implemented a brief sales tax holiday time on many of the items associated with the proper care and feeding of young minds.

Every state has its own set of rules, but, in general, clothing, accessories, sporting goods, computers and software, books and maps, non-commercial office and art supplies (like paper, pens and pencils, calculators, lunch boxes, etc.) and other such items may be eligible.

As eager as parents are to take advantage of the savings, these holidays can make the retailer’s job a whole lot more complicated.

It falls upon the retailer to check with each state and pay close attention to the exceptions to the exemptions. Take Alabama for instance. They’ve set an upper dollar limit of $100 on clothing. That’s pretty straight forward, but the rules get more tricky. Alabama has decided that non-commercial bound books with ISBN numbers less than $30 are exempt, but periodicals aren’t. Personal digital assistants (PDAs) are, but cell phones aren’t. You can bet customers won’t hesitate to complain to the state if they feel they are being “ripped off.”

For another thing, even while the state might be forgiving foregoing the sales tax, that doesn’t mean that every county, city and special district is as well. Consumers rarely realize that even if they shop on the right day and pick up the right item, they might still owe taxes to the local municipality. The retailer gets the joy of explaining that tidbit.

In an effort to help out, the following is a list of this year’s participating states, the dates of this month’s holidays, and a link to the state’s particulars on qualifying items.

Note:
Illinois, Massachusetts and Vermont had sales tax holidays last year, but failed to enact the required laws this year.

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